ERC clarifies disparity in power tariff rates

The Energy Regulatory Commission (ERC) has clarified unequal power tariff rates for households and businesses, which caused the latter to demand authorities reconsider their decision before it takes effect in January next year.

The power tariff, which determines electricity bills, remains unchanged for households at 4.72 baht per kilowatt-hour (unit), while the non-household sector will see the rate increase by 20.5% to 5.69 baht per unit.

The non-household sector includes businesses of all sizes, as well as hotels, farms and nonprofit organisations.

The two power tariff rates will be used for four months from January to April next year.

Households are given the first priority in having their power tariff calculation based on prices of natural gas supplied by domestic sources in Thailand, said Khomgrich Tantravanich, secretary-general of the ERC.

Gas makes up 60-65% of the fuel used for electricity generation, with other sources including coal and renewable energy.

Prices of gas from the Gulf of Thailand are cheaper than those of liquefied natural gas (LNG), which is increasingly imported to offset the drop in domestic gas supply.

At present, around 40% of gas comes from domestic sources, while the remainder comes from the purchase of LNG under long-term purchase contracts and in the spot market.

Prices of LNG in the spot market, which accounts for 18% of gas used in Thailand, are more expensive than purchases under longterm contracts.

According to the ERC, the fuel tariff (Ft), a key component of the power tariff, is based on estimated prices of natural gas — 238 baht per metric million British thermal units (MMBTU) for households and 542 baht per MMBTU for non-households.

The Ft stands at 0.9343 baht per unit for households and 1.904 baht per unit for non-households.

The tariff is adjusted every four months to correspond with changes in energy prices.

Mr Khomgrich said the power tariff decision resulted from talks with the National Energy Policy Council and fuel suppliers over attempts to ameliorate the impact of expensive electricity bills.

He said the new power tariff was aimed at helping the state-run Electricity Generating Authority of Thailand (Egat) better deal with its balance sheet, after running up losses of 125 billion baht by helping the government cap electricity prices.

Egat needs financial support as the losses are expected to exceed 150 billion by the end of next year.

The Federation of Thai Industries does not agree with the new power tariff of 5.69 baht per unit, claiming it will affect operating costs.